October 1, 2024
Say-on-Pay: Highest Average Support Since 2017
Meredith blogged a few weeks ago that this proxy season may have marked the lowest say-on-pay failure rate ever observed. This Semler Brossy report says that as of September 26th, average support at Russell 3000 companies is at 91% – the highest since 2017. Wow! Here are more detailed observations:
– The 1.2% failure rate among Russell 3000 companies (equating to 27 companies) is also lower than any year-end failure rate over the last 10 years. Last year at this time, 2.1% of companies had failed say-on-pay (47 companies).
– 11.1% of Russell 3000 companies and 7.7% of S&P 500 companies have received an ISS “Against” recommendation thus far in 2024. This divergence is a continuation of trends since 2022.
– The gap between the S&P 500 and Russell 3000 average vote support is equal to the gap from 2023. This continues the trend of lower support for larger companies that has persisted over the last five years.
In addition to sharing trends, the report details likely causes of say-on-pay votes under 50% in 2024 – with most relating to a perceived disconnect between pay and performance. Problematic pay practices and rigor of performance goals also played a role at a number of companies.
– Liz Dunshee